The Office of the Clerk Recorder in the County of Santa Clara says that a substitution of trustee and full reconveyance is a single document that lets lenders choose new trustees who then remove liens from properties. Reconveyance is the process of getting liens off of something.
A lawyer at the Law Offices of Peter N. Brewer, Julia Wei, says that when a person borrows money from a bank to buy a house, the house becomes collateral for the loan. The lender gives the borrower a promissory note, and the whole deal is written down in a legal document called a deed of trust, which involves three people.
Wei says that the first party, called the “beneficiary,” is the person or organisation that lent money to buy the property in question. The trustee is the second party. It is the trustee’s job to make sure that the borrower follows the rules in the deed of trust. If the borrower breaks the rules, like by not making payments on time, the trustee can sell the property and get the money back for the lender. The trustor is the third party. This is the person or group that borrowed money to buy the property.
Wei says that the lender must give the trustee the promissory note, the deed of trust, and a request for full conveyance when the loan is paid off in full. After that, the trustee signs a full reconveyance. The trustee sends the beneficiary a copy of the reconveyance and gives the trustor the original deed of trust and promissory note.
Wei says that if the loan is paid off in full and the trustee doesn’t sign a full reconveyance, the beneficiary can use the substitution of trustee and full reconveyance document to name a new trustee, who can then get rid of the lien.